Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

    • vithigar@lemmy.ca
      4·
      7 months ago

      Even accepting the absurdity of suggesting those as “good reasons” to need more than $100 million dollars in a lifetime, fine. You buy both of those and “only” have 30 million dollars to live on for the rest of your life. That’s still very comfortable and more than most people’s lifetime earnings by an order of magnitude.

    • Flying Squid@lemmy.world
      3·
      7 months ago

      You mean cars built specifically for rich people that absolutely no one needs to own? Because you probably can’t own an indoors swimming pool coated in 24 carat gold and the entire pool filled with water with gold flakes suspended in it for under $100 million either. Who gives a fuck?

      Rich people can drive Toyotas and Chevys like everyone else. They could even afford a Porsche.

      You’re not making a very good argument.

        • Flying Squid@lemmy.world
          11·
          7 months ago

          Yes.

          Also, if you are worth $100 million, you can literally afford the most expensive cars ever made and still be a multimillionaire.

          Now, please explain why anyone in this world needs a $30 million car and why it would be a hardship for someone who would still have $70 million after buying it.

          • postmateDumbass@lemmy.world
            11·
            7 months ago

            Because those cars bring new technology to the world.

            They are vehicles for innovation.

            They inspire people involved in making that car to be better at their jobs, to push the envelope.

            Wealth does not trickle down, but technology does.

            And if you want to put a legal limit on innovation and invention, thats an issue.

            • Flying Squid@lemmy.world
              11·
              7 months ago

              What innovation did that $30 million car bring to the world? Please explain specifically what technology trickled down.

              And you still haven’t explained why it would be a hardship for someone with $100 million to spend $30 million of it on a car. Please explain that too.

              • postmateDumbass@lemmy.world
                1·
                7 months ago

                One off the top of my head, the passing material science down from race cars into production quantities (albeit low but then into bmw and benz, then into sport models etc.) benefits to average drivers. More specifically, brake pads. Thier effectiveness and durability are so much better than 30 years ago. save lives all the time, and everyone is driving much faster and braking later.

                I never spoke up on individual wealth and/or income. Pro UBI in fact. But you still need to incentivize learning, innovation, and development somehow. And right now we use money for that mostly. Or stock options, crypto, etc. Drugs, sex, power, indulgences have also been used historically.

                My thrust is that limiting intellectual advancement is stupid.

        • Flying Squid@lemmy.world
          7·
          7 months ago

          That isn’t even remotely the same as communism. That is capitalism with an upper income limit.

          You don’t have some people earning $100 million a year and others making $25,000 a year under communism. That’s only possible in a capitalist economic structure.

          Your understanding of communism is on par with that of Joseph McCarthy.

        • _tezz@lemmy.world
          3·
          7 months ago

          Please stop commenting on politics if this is your level of education on the matter. Communism is absolutely not relevant here, because communism is

          a socioeconomic order centered around common ownership of the means of production, distribution, and exchange that allocates products to everyone in the society based on need. A communist society would entail the absence of private property and social classes, and ultimately money and the state (or nation state).

          You haven’t even begun to understand if you think communism is related to this discussion.